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European Power for 2014 Drops to Record as Carbon, Coal Slide

Jan. 14 (Bloomberg) -- European power for 2014 delivery fell to a record as carbon emissions and coal dropped to all-time lows.

Baseload German 2014 electricity, for supplies delivered around the clock, slid as much as 1.1 percent, while the French equivalent lost 1 percent, according to broker data compiled by Bloomberg.

German power delivered in 2014 declined as much as 47 cents to 43.75 euros ($58.45) a megawatt-hour, a record for the contract. In France, the contract slid 45 cents to 46.40 euros, the lowest since Bloomberg started tracking the contract in January 2011.

“Coal prices are definitely skewed to the downside, with demand continuing to be low and China not buying despite the cold weather over in Asia at the moment,” Gary Hornby, an analyst at Inenco Group Ltd. in Lytham St. Annes, England, said by e-mail.

Average 2014 power prices may fall to as little as 40 to 42 euros a megawatt-hour this year, he said. China will cut coal imports this year as the cost of domestic supply declines, Sanford C. Bernstein & Co. said today in a report.

European coal for delivery in 2014 declined as much as 1 percent to $100.40 a ton, while European emissions allowances for December dropped to a record 5.75 euros a metric ton on the ICE Futures Europe exchange in London. Power can track emissions and coal, which affect production costs.

EON SE, Germany’s biggest utility, said it doesn’t expect a strike today to impact power generation at its plants. Availability in Germany is forecast to rise to 64,300 megawatts on Jan. 18 from 62,700 megawatts today, according to data on the European Energy Exchange website.

RWE AG halted production at its 634-megawatt lignite plant Weisweiler-G on a boiler fault, the company said on its website for real-time power production. The unit is scheduled to start operating Jan. 16.

To contact the reporters on this story: Julia Mengewein in Frankfurt at jmengewein@bloomberg.net; Rachel Morison in London at rmorison@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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